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Singapore To Open Up Banking Services for Cryptocurrency Firms

Traditional financial institutions do not see eye to eye with cryptocurrency firms, but this is about to change. According to Ethereum World News, the Monetary Authority of Singapore is looking to bridge the gap by helping cryptocurrency firms set up accounts in local banks. The financial watchdog cited that digital currency firms are finding it hard to open bank accounts the world over, and this will only impair the growth of the financial services sector. Despite this, the agency vowed that it would not slacken its rules to favor and entice cryptocurrency firms.

Crypto fintech firms in the Asian country have let their complaints known, and they continue to push the government to set up a regulatory framework that will allow them to open regular bank accounts. On the issue, Ravi Menon, the Monetary Authority of Singapore Managing Director, said that they are not trying to create lax regulations to attract the crypto business, but the aim is to bring cryptocurrency fintech startups and banks together to reach a common understanding.

Cryptocurrency Firms and Banks Collaboration

Ravi adds that due to the obscure nature of cryptocurrencies, banks must establish robust methods of authentication. The fintech startups must also chip in to ensure a strong collaboration in good faith. Ravi adds that the Singaporean banks need to apply caution due to the obscurity associated with cryptocurrency business model.

The main agenda of the Monetary Authority of Singapore is to protect investors from fraud, and curbing money laundering especially when it comes to the cryptocurrency sector. The move to ease the tension between cryptocurrency fintech startups and banks is geared toward creating more jobs and spurring innovation. The country had placed stringent measures that sought to harbor the operations of cryptocurrency firms.

Leading Cryptocurrency Adoption in South East Asia

Other than the lack of regulation, Singapore is the third largest ICO launch pad after US and Switzerland. For example, Line Corporation, which is Japan’s biggest instant messaging platform, launched its cryptocurrency exchange platform, Bitbox, in Singapore in July 2018. Binance, one of the largest cryptocurrency exchanges in the world, also set up its camp in Singapore and promised a fiat-cryptocurrency exchange that would be operational by September 2018.

Singapore is looking to go the Japan way and allow as many cryptocurrency trading and exchange platforms to operate in the country as long as they stick to the rules. Their approach to cryptocurrency regulation is more relaxed than in Japan, and this makes the country a testing ground for new technologies. Crypto.com, a blockchain fintech startup with headquarters in Hong Kong, is looking to issue the first Asian cryptocurrency Visa debit card, and it is starting the rollout in Singapore.

Different Approach to Regulation

Japan remains the ideal model for countries looking to regulate cryptocurrency firms, but Singapore in a bid to pave the way for cryptocurrency adoption is looking to a different supervisory model. They have three categories, utility tokens that pay for computing services and will hardly require any regulation. Digital tokens will be governed by the Securities and Futures Act and payment tokens which the Ravi and the Monetary Authority of Singapore do not have a problem with unless they are securities. Surprisingly, the country expressed interest in becoming the first country that will fully integrate DLTs and virtual currency.

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